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Edward Jones Dome authority to seek state tax credits

Edward Jones Dome authority to seek state tax credits

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Rams Stadium rendering

An aerial view of the proposed Rams NFL stadium, looking toward downtown St. Louis. Image courtesy HOK

The public entity that owns the Edward Jones Dome plans to seek $50 million in state tax credits from the Missouri Development Finance Board to help build the proposed stadium aimed at keeping the NFL in St. Louis.

The St. Louis Regional Convention and Sports Complex Authority will formally present its request Tuesday when the finance board, which funds infrastructure and economic development projects, holds its regular meeting in Jefferson City.

The tax credits awards, spread over three years, would be used to help raise money for the open-air stadium that backers want to build on an 88-acre riverfront site just north of downtown St. Louis.

New financial details revealed in the Dome authority’s application include the proposed stadium’s total cost: $998 million, up from the initial estimate of $985 million.

The new cost breakdown is $820 million for site clearance and construction, $60 million for land acquisition and $118 million in “soft costs,” including design and professional fees.

The application expects site preparation to begin early next year, with construction of the 62,500-seat stadium completed in August 2019.

Also new is the amount of anticipated funding from the extension of state and city bonds. Initial funding estimates made in January were for as much as $350 million in bond extensions from the city, state and St. Louis County.

In March, Gov. Jay Nixon pulled the county out of the bond extension part of the project. The Dome authority’s new figures show a total of $201 million raised through bond extensions — $66 million from the city and $135 million from the state.

Up significantly is the anticipated amount of financing through state tax credit proceeds, the finance board’s Infrastructure Fund contributions and other state or city incentives. The estimated new total from those sources is $187 million versus $55 million when the stadium proposal was announced in January.

Also greater is the latest estimate of proceeds from the sale of stadium seat licenses. The Dome authority estimates $160 million in net income from seat licenses, up from the initial estimate of, at most, $130 million.

The authority is requesting $15 million in state tax credits this year and $17.5 million in credits next year and in 2017 for a total of $50 million.

Because the request is over the finance board’s $10 million cap, it also will require special approval from three of Nixon’s cabinet members: the commissioner of the Office of Administration and the directors of the departments of Economic Development and Revenue, according to Amy Susan, a spokeswoman with the Missouri Department of Economic Development. The finance board is an agency of the department.

Without mentioning the Rams specifically, the application says tax-related contributions and tax credit issuances would be contingent on showing that an NFL team would occupy the football stadium.

Last fall, Nixon appointed former Anheuser-Busch President Dave Peacock and lawyer Bob Blitz as the task force to keep the NFL in St. Louis.

In January, Peacock and Blitz announced the proposal for a new stadium in St. Louis days after Rams owner Stan Kroenke leaked word he plans to build a $2 billion stadium in the Los Angeles suburb of Inglewood, Calif.

Kroenke has yet to formally ask the league to let him move the Rams, but league owners might decide at a special meeting in August whether they will allow the team to relocate. Also before the NFL is a competing stadium proposal in Carson, Calif., by the San Diego Chargers and Oakland Raiders.

Peacock said Thursday that seeking the state tax credits “is one of many steps” in securing funding for a St. Louis stadium.

“It’s certainly a sign we’re progressing down the path,” he said.

The stadium proposal is the focus of much pending litigation. A suit by the Dome authority seeks to sidestep a public vote in the city on stadium funding. The city countersued, arguing that its ordinance requiring such a vote is valid. And six state legislators sued Nixon and the Dome authority to block extension of Edward Jones Dome bonds to help pay for a new stadium.

Under one option to be presented to the finance board, the Dome authority would donate $100 million raised for the project to a nonprofit entity, which would then contribute $100 million to the board’s Infrastructure Development Fund.

In return for this contribution, the board would issue $50 million in tax credits to the nonprofit, which in turn would sell the credits and donate the proceeds to the Dome authority. The application says it expects to get about 95 cents on the dollar for those tax credits.

Under this scenario, the $100 million contributed to the Infrastructure Development Fund would be returned to the Dome authority via grants.

Included in the tax credit application is the Dome authority’s cost-benefit analysis of the project. The analysis projects a $146 million benefit in direct stadium construction and football-related activity through 2051. Of that total, the city would receive a $115.7 million benefit even after making annual stadium lease payments, according to the analysis.

EDITOR'S NOTE: This story was updated at 9:45 a.m. Friday to provide state spokeswoman's comment and correct the governor's cabinet members who need to approve the request.

Stadium funding: January versus July proposals

* An NFL loan program to team owners

** January figure based on money from St. Louis city, St. Louis County and state. In March, Gov. Nixon took St. Louis County out of the funding proposal because the county wouldn't participate in a bond extension without a public vote.

SOURCE: St. Louis Regional Convention and Sports Complex Authority

Field 1 January July
NLF team owner $250 million $250 million
NFL G4 program * $200 million $200 million
Dome authority bond extension ** $350 million $201 million
Estimate proceeds from seat license sales $130 million $160 million
State brownfield tax credits, Missouri Development Finance Board (MDFB) tax credits, MDFB infrastructure fund grants, and other public incentives $55 million $187 million
Total $985 million $998 million

Weekday updates on the latest news in the St. Louis business community.

Tim Bryant is a reporter for the St. Louis Post-Dispatch.

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